Germany explores 4-day workweek amid labor shortage

It sounds counterintuitive: While Germany, like many countries, struggles to find enough workers, dozens of companies are starting an experiment that will see employees work a day less. In February, 45 companies and organizations in Europe's largest economy will introduce a 4-day workweek for half a year. Employees will continue to receive their full salary. The initiative is led by the consulting firm Intraprenör in collaboration with the non-profit organization 4 Day Week Global (4DWG).

Advocates argue that a 4-day workweek would increase worker productivity and, by consequence, help alleviate the country's skilled labor shortage. Germany has a long-held reputation for industriousness and efficiency. Yet, in recent years, productivity in Germany has fallen.

What is 'productivity?'

This isn't necessarily because workers are lazy. At its core, productivity is measured by dividing economic output by hours worked. For the last few years, high energy costs have hurt companies' output, leaving them — and the country — with a lower productivity score. If companies can maintain their current output with employees working fewer hours, this would naturally lead to higher productivity levels. But can they?

Advocates argue yes. Employees who work four days instead of five are more motivated and, therefore, more productive, they say. This model could also potentially draw more people into the workforce by engaging those who aren't willing to work five days a week, helping to alleviate the lack of labor.

Workers are less stressed with shorter week

The theory has already been put to the test outside of Germany. Since 2019, 4DWG has been running pilot programs across the globe — from the UK and South Africa to Australia, Ireland, and the US. Over 500 companies have participated in a trial run, and early results seem to favor a shorter workweek. 

Looking at an experiment involving nearly 3,000 workers in the UK, researchers from Cambridge and Boston found that almost 40% of participants reported feeling less stressed after the experiment and that the number of resignations decreased by 57%.

€26 billion worth of sick days

Sick days also decreased by two-thirds. Recent data from the German health insurance company DAK shows that workers in Germany took 20 sick days on average last year. That means illness-related absences caused an overall real income loss of €26 billion ($28 billion) in Germany in 2023, the German Association of Research-Based Pharmaceutical Companies (VFA) said. This would have pushed down economic output by 0.8 percentage points.

Crucially, in the UK experiment, researchers also observed an average revenue increase of around 1.4% in 56 out of 61 participating companies. The majority expressed a desire to maintain the 4-day workweek beyond the test phase.

Creative work could suffer, researchers say

Can it work in Germany, too? Labor market expert Enzo Weber isn't so sure. He conducts research at the University of Regensburg and the Institute for Employment Research and has some problems with the results of the previous pilot projects.

Only companies whose work is suited to a 4-day workweek would apply for such an experiment, he told DW. The results, therefore, can't be taken as applying to the economy as a whole.

Weber also doubts the positive results because reducing working hours would likely lead to more concentrated work. Fewer hours would mean a hit to social and creative elements of work. Here the consequences wouldn't be immediately felt, especially not in studies designed to only last six months.

Model won't apply to many industries

Other skeptics point to the challenge of measuring productivity. Reduced working hours could lead to structural changes that have a greater effect on productivity than employee engagement. Holger Schäfer, a researcher at Cologne's German Economic Institute (IW), says it's a fantasy to expect a 25% increase in productivity in exchange for a 20% reduction in working hours.

Economist Bernd Fitzenberg of Germany's Institute for Employment Research (IAB) says a 4-day week could mean higher costs for companies if "spreading working hours over just four days is not offset by productivity gains."

"It becomes challenging in fields where services have to be provided in the here and now, at fixed times, for customers, or people who are being cared for," he told DW, adding that a 4-day week will, therefore, be more difficult to implement in fields like nursing, security services, or transportation. "If we were to rigidly implement such a regulation across all industries in the same way, it could hurt competitiveness."

Despite the counterarguments, the 4-day workweek still holds an attraction, even for well-established industrial players. German trade union IG Metall has been advocating for shorter working hours for some time. In the steel industry, for example, only 35 hours per week are currently worked.

Edited by: Ashutosh Pandey 

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